Correlation Between ACS Actividades and Bouygues
Can any of the company-specific risk be diversified away by investing in both ACS Actividades and Bouygues at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ACS Actividades and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACS Actividades de and Bouygues SA ADR, you can compare the effects of market volatilities on ACS Actividades and Bouygues and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ACS Actividades with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACS Actividades and Bouygues.
Diversification Opportunities for ACS Actividades and Bouygues
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ACS and Bouygues is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades de and Bouygues SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA ADR and ACS Actividades is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ACS Actividades de are associated (or correlated) with Bouygues. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bouygues SA ADR has no effect on the direction of ACS Actividades i.e., ACS Actividades and Bouygues go up and down completely randomly.
Pair Corralation between ACS Actividades and Bouygues
Assuming the 90 days horizon ACS Actividades de is expected to generate 0.38 times more return on investment than Bouygues. However, ACS Actividades de is 2.63 times less risky than Bouygues. It trades about 0.18 of its potential returns per unit of risk. Bouygues SA ADR is currently generating about -0.17 per unit of risk. If you would invest 4,238 in ACS Actividades de on August 28, 2024 and sell it today you would earn a total of 295.00 from holding ACS Actividades de or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACS Actividades de vs. Bouygues SA ADR
Performance |
| Timeline |
| ACS Actividades de |
| Bouygues SA ADR |
ACS Actividades and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACS Actividades and Bouygues
The main advantage of trading using opposite ACS Actividades and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACS Actividades position performs unexpectedly, Bouygues can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bouygues will offset losses from the drop in Bouygues' long position.| ACS Actividades vs. Acciona SA | ACS Actividades vs. JGC Corp | ACS Actividades vs. Kajima Corp ADR | ACS Actividades vs. ACS Actividades De |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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